/u/TearRepresentative56's posts
IMPORTANT: I mentioned this multiple times in the sub over last few days. Whilst circumstances are pointing to a buy the dip, markets will remain pressured into august opex due to all that bearish pressure. Its important to trim ur positions as they profit and move stops on rest to BE.
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META ripped. AMZN next? Positioning looks strong. Skew is flat, but positioning skewed mostly to calls. RIVN price increase should help them, as should record prime day. AWS looks to be taking market share from MSFT. Let's see if we get both
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In tough markets like this, remember its a valid strategy to sit quietly and to protect your YTD gains. Market itself doesnt know what way to go as its evaluating the recessionary risks, so its hard for you to. Positioning is bearish for now, so hard to fight against that except on squeezes.
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Anyone telling you credit spreads are sky rocketing right now doesn't understand that they are still at historically v low levels. This means that the market is not seeing a major credit event, despite VIX move. i told you, retail watch VIX, institutions watch Credit Spreads.
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This is a tough market to navigate right now as the market weighs up rate cuts (bullish), vs recession risk (bearish). Ydays ISM data took the wind out the sails entirely. Manufacturing index came soft, with employment with a massive miss. Traders worry rate cuts are bc recession coming fast.
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Credit default swaps which had been sleeping are now starting to rise along with VIX. This does point to an increase in genuine perceived risk in the market right now, as market weighs recessionary risk. Another reason for cautious trading right now as we need to see how credit swaps react in ST.
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if you are worried about downside risks, or the carry trade bearishness, or recession bearishness, soemtimes best is to sit on cash/ your hands to see what happens. Wait for a clear sign so you can buy a direction with conviction. Or buy slowly. This is v much in the arsenal of successful traders.
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V COMPREHENSIVE: We saw strong reversal yday, but As I mentioned, Markets will likely remain under pressure until OPEX still. Some fast squeeze bounces like yday, but overall still likely to be pressured. Heres a look at positioning, skew, & the Japanese influence with KEY new data out yday, & more.
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ISM services comes out stronger than expected. Market needed that to quell some recession fears. Services PMI still growing. Prices a concern but overall print was what the market wanted to see.
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A good point by Bank of America, although they are slow to the party in realising this lol. They note that the fact that Investors are holding a record $6 trillion into money market funds is a contrarian bullish signal. Its bullish for sure as this money can rotate into equities to fuel move higher.
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